Hedge Funds’ Favorite Gaming Stocks amid Robust-Growing Video Gaming Industry

#4. Zynga Inc. (NASDAQ:ZNGA)

– Investors with long positions as of March 31: 17

– Aggregate value of investors’ holdings as of March 31: $318.44 Million

The hedge fund sentiment towards Zynga Inc. (NASDAQ:ZNGA) declined during the first three months of 2016, as the number of “hedgies” with stakes in the company dropped to 17 from 20 quarter-on-quarter. Similarly, the overall value of those funds’ stakes in Zynga decreased to $318.44 million from $509.61 million. Those 17 funds accumulated roughly 16% of the company’s outstanding shares. The social game developer, which generates revenue through the in-game sale of virtual items to players who can play for free, has seen its shares advance 23% in the past three months. While Zynga’s monthly active users for the first three months of 2016 dropped massively to 68 million from 100 million recorded in the same period of the prior year, the online game maker’s total revenue rose to $186.72 million from $183.29 million. The company’s ad sales for the quarter jumped 41% year-over-year to $49.66 million. Ricky Sandler’s Eminence Capital trimmed its stake in Zynga Inc. (NASDAQ:ZNGA) by 28% during the first quarter to 55.24 million shares.

#3. Take-Two Interactive Software Inc. (NASDAQ:TTWO)

– Investors with long positions as of March 31: 42

– Aggregate value of investors’ holdings as of March 31: $968.08 Million

Take-Two Interactive Software Inc. (NASDAQ:TTWO) was a hedge fund darling during the first quarter of the year, as the number of asset managers from our database with stakes in the company climbed to 42 from 36 quarter-on-quarter. The aggregate value of all those stakes grew to $968.08 million from $914.96 million during the first three months of the year. More importantly, the hedge funds stalked by Insider Monkey invested in the developer of interactive entertainment hoarded up around 30% of the company’s outstanding common stock. Soon after the video game publisher, which publishes products through its two labels: Rockstar Games and 2K, released a strong earnings report for the fourth quarter of fiscal 2016 that ended March 31, analysts at Jefferies cut the price target on the company to $45 from $48 while maintaining their ‘Buy’ rating on it. The price cut is said to reflect the fact that developer Rockstar Games is not set to release a “big, new game” until 2018. The company’s shares are 10% in the green year-to-date. David Einhorn’s Greenlight Capital owns 2.84 million shares of Take-Two Interactive Software Inc. (NASDAQ:TTWO) as of the end of March.